Zambian government to set up a working group to save embattled Zamtel

Word reaching BusinessTech Africa is that Zambian state-owned telecommunications company, Zamtel, is financially struggling and the government is making plans to save it.

Zamtel has been reportedly put on sale by the government but it seems the purposed move will be put on hold for now.

Media reports reveal that the country’s President Hakainde Hichilema has put together a team of a working group to determine the future of the financially beleaguered entity.

As per media reports, the working group will probe the viability of the company and suggest appropriate action to save it.

In a communique leaked to various media houses penned by the Deputy Secretary to the Cabinet Siazongo Siakalenge, it suggests that the group will soon be inaugurated by Science and Technology Minister Felix Mutati.

“Please note that your participation in this technical working group is cardinal as it will help in repacking some of the issues as well as coming up with reconnect and appropriate solutions for the way forward,” reads part of the letter.

The financially struggling entity is the third biggest in the country and is rated behind South Africa’s MTN Zambia and India’s Airtel Zambia – but it boasts over three million subscribers.

“In July this year, Mutati said Zamtel needs a recapitalisation to the tune of US$265-million in order to survive, but that the government did not have the money,” reports ITWeb.

“The Minister added that Zamtel has a working capital deficit of approximately ZMK1-billion with the balance sheet unable to support the maintenance of current infrastructure, expansion, and modernisation.”

Mutati further advised that the company urgently needed to invest in its co-networks, infrastructure, and other business support services to boost its revenue.

However, there has also been wide speculation regarding its future under the ownership of the government with reports indicating that the state wants to sell Zamtel to a foreign company after failing to recapitalise it.

Despite that, authorities have rubbished this and insist the intention is to recapitalise it to ensure it is able to continue to compete in the local telecommunications market.

“For those plotting and planning to sale state-owned enterprises and assets including Zamtel, the constitution (Law) now provides that parliament approval, signified by two-thirds majority vote should be sought,” said ex-Ambassador to Ethiopia Emmanuel Mwamba.

Main Image: Zamtel/Africa Business Communities